FR Doc E4-3400
[Federal Register: December 1, 2004 (Volume 69, Number 230)]
[Page 69900-69901]
From the Federal Register Online via GPO Access []
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Arbitration Panel Decision Under the Randolph-Sheppard Act

AGENCY: Department of Education.

ACTION: Notice of arbitration panel decision under the Randolph-
Sheppard Act.


SUMMARY: The Department gives notice that on July 26, 2002, an 
arbitration panel rendered a decision in the matter of Kentucky 
Department for the Blind v. U.S. Department of Defense, Department of 
the Army (Docket No. R-S/01-11). This panel was convened by the U.S. 
Department of Education, under 20 U.S.C. 107d-1(b), after the 
Department received a complaint filed by the petitioner, the Kentucky 
Department for the Blind.

FOR FURTHER INFORMATION CONTACT: You may obtain a copy of the full text 
of the arbitration panel decision from Suzette E. Haynes, U.S. 
Department of Education, 400 Maryland Avenue, SW., Room 5022, Potomac 
Center Plaza, Washington, DC 20202-2800. Telephone: (202) 245-7374. If 
you use a telecommunication device for the deaf (TDD), you may call the 
Federal Information Relay Service (FIRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 

SUPPLEMENTARY INFORMATION: Under section 6(c) of the Randolph-Sheppard 
Act (the Act), 20 U.S.C. 107d-2(c), the Secretary publishes in the 
Federal Register a synopsis of each arbitration panel decision 
affecting the administration of vending facilities on Federal and other 


    This dispute concerns the alleged noncompliance with the Act by the 
U.S. Department of Defense, Department of the Army (the Army), 
regarding its cancellation of a food service contract at Ft. Campbell, 
Kentucky, operated by the Kentucky Department for the Blind, the State 
licensing agency (SLA), in violation of the Act (20 U.S.C. 107 et seq.) 
and the implementing regulations in 34 CFR part 395.
    A summary of the facts is as follows: On February 15, 1996, the SLA 
was awarded a contract to provide full food services in the military 
dining facilities at Ft. Campbell, Kentucky. Following the contract 
award, the SLA appointed a qualified Randolph-Sheppard vendor to 
perform the contract requirements. Subsequently, the vendor entered 
into a joint venture contract agreement with First Choice Food Service 
to assume the contractual obligations.
    On January 21, 2000, at the end of the third option period for the 
food service contract at Ft. Campbell, the SLA contacted the Army to 
request that both parties enter into negotiations for the continuation 
of the food service contract. The Army did not respond to this initial 
request. Then on August 9, 2000, both parties met to discuss 
continuation of the food service contract, but this meeting did not 
result in a negotiated contract.
    Later in March 2001, the SLA alleged that, without explanation, the 
Army discontinued the SLA's contract effective April 1, 2001. The SLA 
further alleged that, despite repeated requests to negotiate the Ft. 
Campbell food service contract with the Army, there was no 
communication until June 20, 2001, when an Army contracting officer 
posted a solicitation announcement in Commerce Business Daily (CBD) for 
provision of the dining facility attendant services at Ft. Campbell. 
The procurement was limited to Small Business Administration (SBA) 
certified personnel.
    On July 25, 2001, the Governor of Kentucky wrote to the Secretary 
of the Army requesting that the Army reconsider its decision to exclude 
the SLA from competing for the contract to provide dining facility 
attendant services at Ft. Campbell. The Army did not respond to the 
Governor's letter. On August 14, 2001, the Army amended its CBD 
announcement. On August 24, the Army issued a solicitation stating that 
the procurement was to be administered by an SBA 8(a) set-aside 
    The SLA alleged that, as the result of a recent court case, NISH 
and Goodwill Services, Inc. v. Cohen, 95 F. Supp.2d 497, 503-04 (E.D. 
Va. 2000), military dining facilities have been determined to come 
within the definition of cafeteria under the Act.
    The SLA further maintained that neither the Act nor its 
implementing regulations differentiate between the performance of 
``full food services'' or ``dining facility attendant services'' in 
military dining facilities. In fact, it was the SLA's position that 
dining facility attendant services and full food services constitute 
cafeteria operations under the Act.
    Therefore, the SLA alleged that the Army's refusal to allow the SLA 
to renegotiate its food service contract at Ft. Campbell demonstrated 
the Army's unwillingness to comply with the Act and its implementing 

[[Page 69901]]

    As a result of this dispute, the SLA requested the Secretary of 
Education to convene a Federal arbitration panel to hear this 
complaint. A panel was convened, and a hearing on this matter was held 
on May 13, 2002.

Arbitration Panel Decision

    The arbitration panel heard the following issue: whether the Army's 
alleged failure to negotiate with the SLA in good faith for the full 
food services and dining facility attendant services contract at Ft. 
Campbell, Kentucky, constituted a violation of the Act (20 U.S.C. 107 
et seq.) and the implementing regulations in 34 CFR part 395.
    After considering the evidence presented, the majority of the panel 
ruled that the Act clearly covers all types of food service operations 
including military troop dining facilities. The panel stated that the 
Army's provision of cooks for the dining facility at Ft. Campbell did 
not mandate the exclusion of the SLA from the opportunity to provide 
other services.
    Further, the panel found that the Army's issuance of a new 
solicitation amounted to a limitation on the placement or operation of 
vending facility services on Federal property as provided by the Act. 
The panel also noted that the Act states that Federal agencies may give 
priority to SLAs through direct negotiation whenever a vending facility 
can be provided at a reasonable cost with food of a high quality, 
comparable to that currently provided.
    Accordingly, the panel ruled that the Army failed to present any 
evidence that it complied with the requirements of the Act and the 
implementing regulations prior to excluding the SLA from its 
procurement for food services at Ft. Campbell, Kentucky.
    Therefore, the panel ruled that the Army should engage in direct 
negotiations with the SLA for its dining facility attendant services 
requirement at Ft. Campbell, Kentucky.
    One panel member dissented.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the U.S. Department of Education.

Electronic Access to This Document

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    Note: The official version of this document is the document 
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    Dated: November 24, 2004.
Troy R. Justesen,
Acting Deputy Assistant Secretary for Special Education and 
Rehabilitative Services.
[FR Doc. E4-3400 Filed 11-30-04; 8:45 am]